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Follow-Through Needed for Effective Safety Culture

The concept of a culture of safety can be stalled by employers that say they want to be safer, but do little to implement real change.

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For example, a company hoping to understand the causes of fatigue, but won’t adjust its schedules, can set itself up for injuries and hazards.

A new report, Making a Safety Culture Truly Cultural, published by KPA, a risk management consultancy found that:

  • 90% of employers want to understand root causes of employees’ fatigue,
    but only 55% say they will adjust schedules or tasks.
  • 51% assign a night shift to an employee immediately before or after a day shift.
  • 60% that know rest is important lack a designated area for employees to do so.

“You may think a workplace fatality is unlikely, but put it into perspective,” the report says. “The Centers for Disease Control and Prevention estimate that a fatal injury could cost nearly $1 million. And the National Safety Council estimates the cost at $1.4 million. Also, factor-in the indirect costs of lost productivity, employee replacement, insurance and attorneys, and the cost jumps to $3 million on average.”

The study offers tips for employers trying to embed safety into their organizational DNA. It also explores how employers who invest time, funds and effort into reshaping their culture can save millions in structural and legal damages.

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The report puts safety under a microscope to discuss:

  • Its current state in U.S. workplace
  • Where it needs to change
  • How to create a new culture
  • Return on investment
  • How behavioral changes can be key to preventing injuries

The report features case reviews where employers were both proactive and reactive in their efforts to make their workplaces safer. Some were in conjunction with a 2015 OSHA initiative and included adding hands-free tools, re-engineering control systems and installing metal guards to prevent contact with moving machinery.

These actions caused small habit changes that contributed to the larger goal of creating a culture of safety, the report says. Even changing a bad habit such as slow reporting into prompt reporting has proven to reduce future injuries. Addressing one safety issue at a time rather than several concurrently, KPA contends, is the most effective sequence for reshaping a culture.

Habit loops and how cues within those loops translate into the workplace were also explored.

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“It’s hard to change habits, but we can fiddle around with the components of the habit loop,” KPA says. “When behaviors become good habits—part of our routine and organizational DNA—that is a clear sign of developing a true safety culture.”

The report is currently available to RIMS members. To download the report, visit the RIMS Risk Knowledge library at www.RIMS.org/RiskKnowledge. All downloads of this publication will be shared with the sponsor, KPA.

To learn about other RIMS publications, educational opportunities, conferences and resources, visit www.RIMS.org.

Steering the Sales Strategy Toward Compliance

It isn’t difficult to understand that one of the main reasons a salesperson would make a bribe is to make a sale.

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This kind of corrupt practice is common and even expected in many areas of the world. It is why sales and anti-corruption compliance are so often uttered in the same breath.

Sales and compliance is a pairing that must be examined closely and continuously. However, risk assessments often aren’t thorough, internal controls don’t catch suspicious transactions, and one side doesn’t know (or trust) what the other is doing.

When the compliance and sales functions aren’t aligned with respect to how they approach anti-corruption risk, all of the above missteps can happen. Even more frustrating is that most sales leaders want to behave ethically—they want to close sales based on their own skill rather than by cheating. Winning is that much sweeter when they do. So then, how do things keep going awry in practice?

For starters, the emphasis on ethical conduct doesn’t resonate with the sales department because they hear multiple conflicting messages. One comes from the top, that ethical conduct is important. The other comes from somewhere below the top, that sales goals must be met by any means necessary.

This is a situation that requires some serious thought; it means that your corporate culture isn’t unified. Instead, you have a subculture (meet sales goals) that contradicts the ethical culture the CEO and other senior executives like to talk about. If you can identify that you do have conflicting messages and subcultures at your organization, then you can attack that subculture with practical steps to stamp it out.

One place to start would be rethinking your incentive program. Sales teams live and die on incentives—and there’s nothing inherently wrong with that, if your incentives push them in the correct way. Do your incentives punish failure more than they reward success? Do they encourage cooperation among the team or do they pit sales reps against each other?

Of course, independent measures should be part of a compliance program, such as accounting controls that block suspicious payments to intermediaries, or audits of due diligence procedures. The compliance function always needs to act with independence, and verifying the sales team’s compliance with policy and procedure is part of that job.

Even so, companies don’t really encourage compliance itself. Rather, they explain compliance, which is a procedure that employees should follow. They encourage ethical conduct, which is (or should be) a core corporate value—and when employees embrace it, their behavior naturally follows the compliance procedures companies have established.

What’s the point of making this seemingly small distinction? The reason is that companies can indeed enforce compliance with the sales team: by auditing and punishing non-compliant behavior or sealing up opportunities for non-compliance. If those efforts are strong enough, you might even prevent compliance failures on those efforts alone.

Ultimately, though, what will the financial or cultural cost be? A stringent system of controls, rules, and punishment might make for fewer FCPA mistakes (although that’s a stretch). It also sounds like a painstaking system to implement and a miserable place to work.

The alternative is to make sure that ethical business conduct is at least an equal priority (if not greater) to hitting sales targets. Then you can ask: are we structuring incentives to support that priority?

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Are we relying on intermediaries and agents to the minimum amount necessary? How many due diligence duties can we put onto the sales team, and how many do we place with compliance or audit to trust but verify?

These are important questions and their answers are not always easy to find.

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In most organizations, with pre-existing sales functions, business practices, and cultures, the answers will also be laborious to implement. At least, however, sales and compliance will be aiming toward the same objective of doing business ethically—and that is what alignment is.

Working from a place of alignment stands a far better chance of keeping sales practices compliant than having sales and compliance teams circling each other in distrust.

That leads only to frustration and a negative work environment. Encouraging ethical conduct rather than merely “teaching compliance” will position your organization for greater success.

Body Scanners Installed in L.A., Tested in Other Locations

Security scanners that screen passengers entering stations and terminals are being tested around the country and have been installed in subway stations in Los Angeles. The Associated Press reported that the machines scan for both metallic and non-metallic objects. They can detect suspicious items from a distance of 30 feet and are capable of scanning more than 2,000 passengers per hour. About 150,000 passengers ride on the Metro’s Red Line daily and the subway system counted more than 112 million rides last year, the AP said.

The New York Times reported that the federal government has been studying the technology for 15 years. The Transportation Security Administration (TSA) partnered with the Los Angeles transit agency on the project, helping the agency test and vet security technologies. The devices purchased are made by the company Thruvision and can be placed at locations throughout the transit system, officials said.

According to the Times:

Officials in Los Angeles said that riders need not worry that their morning commute would turn into the sort of security nightmare often found at airports or even sporting events. The portable screening devices, which will be deployed later this year, will “quickly and unobtrusively” screen riders without revealing their anatomy and without forcing them to line up or stop walking, they said.

“We’re looking specifically for weapons that have the ability to cause a mass casualty event,” Alex Wiggins, the chief security and law enforcement officer for the Los Angeles County Metropolitan Transportation Authority, said Tuesday. “We’re looking for explosive vests, we’re looking for assault rifles. We’re not necessarily looking for smaller weapons that don’t have the ability to inflict mass casualties.”

On Aug. 14 the scanners were tested in the Port Authority Bus Terminal in Manhattan, where in December a man set off a crude pipe bomb in an underground subway passageway, injuring himself. It is estimated that the Port Authority serves about 8,000 buses and 225,000 commuters daily.

As the Risk Management Monitor reported, the TSA also tested body scanners in New York’s Penn Station in Manhattan in February and has conducted tests at Union Station in Washington, D.C., and at a New Jersey Transit station during Super Bowl XLVIII, the AP said.

Cyber Insurance Strategies Explored: RIMS Report

High-profile data breaches have been making headlines recently, and their damage can transcend industries, which is why cybersecurity is often a top priority for risk managers. With many traditional insurance policies no longer responding to or outright excluding cyber events, risk professionals must understand their options to ensure the organization is protected in the event of a data breach.

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A new report by RIMS, A Guide to Cyber Insurance, provides a roadmap for determining the type of coverage risk managers need in the fast-changing world of privacy, data protection, and cyber risk management. The study serves as a reference for risk professionals who are exploring options to effectively manage cyberrisks that are uncovered or not addressed by the organization’s existing risk management program.

Topics include:

  • The cyber insurance application process
  • Procurement of insurance
  • Management of cyber claims
  • Third-party coverage
  • Litigation strategies, and other pertinent details

“While cyber risk management policies are necessary for every organization, reducing a category of risk to zero is impossible,” the report notes. “Cyber insurance can help cover the gaps between a robust risk management program and any remaining risks.”

The report also features case reviews in the areas of cyber policy coverage litigation, negligence, computer fraud, technology errors and advertising and personal injury coverage. “While the overall decision-making process is much the same as with other litigation decisions, certain factors are more complex in the cyber insurance context compared to other insurance disputes,” the authors note.

The Guide doesn’t only focus on insurance. It also features helpful tips when implementing a strategic risk management program characterized by a cybersecurity framework. Pre-event planning and preparation, penetration testing and response ideas are offered as well.

“Following the purchase of some form of cyber coverage, risk professionals need to be prepared for the worst: a cyber event and any resulting claims,” the report states.

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“An organization needs to understand both the risk it faces and the coverage options available to ensure that the cyber policies it purchases provide the necessary coverage when it experiences the inevitable data breach or other cyber events.”

A Guide to Cyber Insurance is authored by Bradley Arant Boult Cummings law firm members: Dylan C. Black, A. Kate Margolis, G. Benjamin Milam and Emily M. Ruzic.

The report is currently available to RIMS members.

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To download the report, visit the RIMS Risk Knowledge library at www.RIMS.org/RiskKnowledge. To learn about other RIMS publications, educational opportunities, conferences and resources, visit www.RIMS.org.